Skewed termination rates in Europe: Austrian regulator TKK sees urgent need for European Commission action

Press release dated 11 November 2014

“The Telekom-Control-Kommission (TKK) has information which indicates that not all regulatory authorities within the European Union are uniformly applying the European legal framework governing electronic communications networks and services. This is especially apparent in the case of the mobile termination fees charged in Germany, which put Austrian businesses and consumers, who also have to pay such charges, at a disadvantage,” stated Johannes Gungl, Managing Director of RTR’s Telecommunications and Postal Services Division, in criticism of Germany’s regulatory practice.

Asymmetry in termination rates is detrimental to Austrian customers

Much higher mobile termination rates have been set for international calls to Germany, which play a major role for Austrian customers. Austrian telecommunications providers currently pay 1.79 EUR cents per minute, which is more than twice the amount that Austrian telecoms receive from German providers (0.8049 EUR cents).

“As far as we know, Germany’s regulator is about to set new mobile termination rates. Yet they will be reduced only marginally and will therefore continue to be more than twice the current mobile termination fee charged in Austria. This in our view is another instance of failure to comply with the European regulations,” Gungl stated. “This obvious asymmetry in mobile termination rates represents a heavy burden for our telecoms and also has a detrimental impact on business conditions in Austria,” Gungl asserted, adding: “We are not going to simply accept that.”

TKK demands action from the European Commission

Consequently, in the interests of the sort of reliable cooperation required to fulfil EU regulations, the Austrian regulatory authority sees an urgent necessity for the European Commission to correct, soon and permanently, this skewed relationship in termination rates between Germany and Austria. “We have presented our view in a letter to the European Commission. The facts have been on the table for a while, now it is high time for legal measures,” Gungl concluded.

Background information

In May 2009 the European Commission adopted a recommendation on the regulation of fixed and mobile termination rates in the EU; the national regulatory authorities were supposed to follow the recommendation as closely as possible when issuing regulatory decisions.

In compliance with those regulations, the TKK set termination rates during corresponding procedures in September 2013. A maximum termination rate of 0.8049 EUR cents was defined for mobile calls, while for fixed network operators a (maximum) rate was set depending on the period during the day, i.e. 0.137 EUR cents (peak hours) and 0.085 EUR cents (off-peak).

The Austrian Regulatory Authority for Broadcasting and Telecommunications (RTR) provides operational support to the Telekom-Control-Kommission (TKK) in the fulfilment of its mandate.